On Acme Fabco Cost Reduction Program
Acme Fabco company, a company that have a strong position in terms of marketing and is dependent of imports decides to have a cost reduction program that will make them maintain their strong position. Alice a department head of this company needs to layoff 6 employees which include two handicapped employees. She wants to keep the two handicapped employees instead of two senior employees. Her decision is now subjected to ethical issues, business issues and personal issues. The reasons of her decision and its effect is analyzed in her point of view and also for the company as a whole.
The main purpose of this case study is to analyze the decisions of Alice regarding Acme Fabco’s cost reduction program. It is also included that ethical, business or personal issues are part of the scope of this case study in order to relate the decision of Alice with the elimination of workers. Moreover, Alice actions with regards to these issues are more focused on
Acme Fabco, a company who is dependent on imports have a strong competitive position against other companies who are also in this type of business. To remain in this position, the Acme Fabco company
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This strategy is not knew to every company, in fact it a well known strategy for a company to limit the release of the company’s fundings. The main agenda here is that Alice who is a department head of this company must terminate the employment of 6 recently hired employees. 2 of these 6 employees are handicapped but are trained to meet the company’s standard. This made Alice to request to make the 2 handicapped employees an exception to the layoff. This decision includes the three concepts mostly done within every company; ethics issue, business issue and personal issue.
Ethics or in business term we call it professionalism. Professionalism is the opposite of a personal issue because to be professional is to use you’re knowledge, talent, skill or experience to decide on something. In Alice case, her decision that is to stick on the 2 handicapped employees rather than 2 employees who have worked with the company a very long time. In Alice point of view, she likes to keep the two handicapped employees with no professional reasons at all. If she requested a permission for the two handicapped employees, she must also submit her reasons why she thinks the two handicapped employees must stay. There is no clear use of experience or knowledge why seniority of two other employees is greater than the two handicapped employees.
In terms of business issue also means focusing on the business as a whole disregarding the small factors that will affect the business. In this point of view, the two handicapped employees will be most likely be removed. A company’s rule has no exception and it is clear from the president’s statement that job and benefits will be given for those employees that will be included in the lay off. The objective of this layoff is to keep or improve the company’s position in the market. Therefore, layoff is only a small factor when you think of the business as a whole. The decision of Alice is not of this part because seniority is also related to experience. Removing a more experienced person rather than a handicapped one with no major reasons is a bad decision.
Lastly, personal issue is the use of your own opinion, emotion or instinct to decide on something. This is the issue that is obvious on the case because of pity. For Alice, the two handicapped people and two senior employee have met the company’s standard for her to decide that the two handicapped employee will not be a burden to the company. Moreover, Alice also thinks in such a way that the two senior employees have a better way of living and can have another job after compared to the two handicapped people. There is no direct comparison of the skills, experience and talent of both parties which means that the decision is based more of Alice opinion.
If in case the request to keep the handicapped employees will be approved. It is not a good image for the company and for the president because of bias. The president should have a firm decision for a company to stand on. Breaking the rule will lead to uncertainties and more problems with the employees who are removed. On the other hand, Alice proposal for the layoff that it will be in a division wide basis rather than department basis is good since major problems will be lessened. There will be less questioning on why the two handicapped employee will not be part of the layoff but still you cant remove the fact that it is bias. It is still unfair since the scope for termination is changed in favor with the two handicapped people.
The skill of the two handicapped employee is not a question because in the first case they are trained to meet the requirements of the company. This means that they are qualified to take the job but the question is which is more efficient comparing the senior employees and handicapped employees.
Decision making is a critical analysis of a two different parties in which you must decide which of these two parties is better. Alice as a department head should already have the experience of both parties since she already know both of them. This experience is already a big solution because it is a good reason for Alice to choose the better party.
Alice needs to check the two handicapped employees and the two senior employees in terms of their skills, work experience and determination. Having more knowledge and experience on something can make you analyze which of the two parties can handle the job more. She should also think which party will she be able to connect with. Relationship in companies especially in their own divisions is a big help in doing projects. She should choose to whom she would be able to work well. Considering these variables also imply that you are a professional. Alice should think in this manner for her to take higher responsibilities like higher positions.
For the company, Alice should decide which of these two parties are more determined in doing their job. The company is willing to help those employees who are part of the layoff so Alice should not think of the effect of removing someone just because they cannot have another job.
Moreover, the company should have a more accurate solutions. Layoff is not the only solution to minimize costs. The new trend in business is no longer focused on limiting the fundings just to maintain a strong position. Companies now focus on their weakness and maintain their strengths. A good example is that a company who is good in marketing but is slow in improving their product should focus in improving their research strategies.
Acme Fabco as a company that depends on import should have employees that excels in marketing and economics without a limitation to age or misfortunes. Employees with skills and experience on this type of business is important. Cutting costs and layoff is not avoidable sometimes but a good plan is needed to maintain the position of the company. A good layoff plan is to suspend or shift employees to other sectors of the company and they will be returned after the company increases its fundings. To avoid layoff, a company from the start uses modern way of producing their products. In this way employees are reduced and the quality and quantity of the product is also increased.
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